- The European Central Bank cut interest rates by 25 bps, in line with expectations.
- Preliminary Q4 GDP data came in weaker than forecasted.
- XAU/USD nears record highs, approaching the $2,800 mark.
XAU/USD trades just below its record high near $2,790 as recent macroeconomic developments apply downward pressure on the US Dollar (USD).
Ahead of Wall Street's open, the European Central Bank (ECB) announced a widely expected 25-basis-point (bps) rate cut. This adjustment brings the interest rate on main refinancing operations to 2.9%, the marginal lending facility to 3.15%, and the deposit facility to 2.75%. ECB President Christine Lagarde's press conference had a dovish tone, signaling potential further rate cuts amid ongoing economic concerns, though inflation worries have eased.
Simultaneously, the United States (US) released preliminary Q4 Gross Domestic Product (GDP) data, revealing annualized growth of 2.3%, falling short of the expected 2.6% and well below Q3's 3.1%. The core Personal Consumption Expenditures (PCE) Price Index rose 2.5% quarterly, aligning with market forecasts. Additionally, Initial Jobless Claims unexpectedly dropped to 207K from 223K in the week ending January 24, suggesting a resilient labor market. However, weaker-than-expected growth data further pressured the USD.
XAU/USD Technical Outlook
Gold is approaching its all-time high of $2,790.11 and appears poised to break above the $2,800 threshold. While sellers may emerge at this level, strong bullish sentiment should keep the uptrend intact, potentially driving XAU/USD toward the $2,810 - $2,820 range.
In case of a pullback, buyers are likely to step in near $2,771.90, the January 27 intraday high. As long as this support holds, bulls will maintain control.
